Promotional campaigns such as marketing and advertising, are ubiquitous mechanisms for inducing consumers to consume, i.e., to purchase goods and services. For example, merchants often issue coupons as incentives for consumers to buy their goods and rewards cards. Credit card issuers often award points/credits/rewards as incentives for consumers to use their credit cards.
To develop an effective promotional campaign, it is very important for the promoter (e.g., the merchant or the credit card issuer) to have timely, quality feedback regarding whether and in what manner their promotional offers are actually acted upon by consumers. In this regard, conventional promotional campaigns have shortcomings.
With conventional promotional campaigns, it is difficult or impossible to know how effective the campaign was, because there is no direct feedback provided to the promoter regarding which particular consumers acted upon the offer, exactly when they acted upon it, etc. This is because traditional promotional campaigns target a broad segment of consumers, not individuals, since it is often cost-prohibitive to target consumers on an individual basis. Consequently, results of promotional campaigns are often difficult to measure.
Sometimes only statistical data is available to the promoter, perhaps months after the campaign has ended. For example, an increase in sales of a particular product may or may not be attributable to a marketing campaign of television and radio advertisements over the previous three months, and there is often no way for the promoter to know whether any particular consumer was even aware of the offer. Campaigns such as these can be very expensive.
Giving consumers paper coupons helps to quantify results, because coupon redemption can be tied to specific sales, which might not have been made without the coupon. However, coupons are expensive to print and distribute to consumers. Further, it is expensive to train agents at the point of sale (POS) terminals to recognize valid coupons, to avoid expired coupons or fakes, and to take the extra time to handle the coupon. Collecting and collating the redeemed coupons, which is critical to collecting the campaign results, also adds cost.
Technology is increasingly being used to alleviate some of the drawbacks of traditional coupon campaigns. For example, all-electronic coupons, delivered as email or short message service (SMS) messages, can avoid the paper handling costs when the POS terminal is able to capture the coupon information.
In one known promotional campaign, a credit card issuer and a fast food chain collaborated to award a free purchase to the consumer after a certain number of purchases by the consumer at the restaurant with a particular credit card. The campaign was a targeted mass mailing. A central, computer-implemented event engine detected the Nth purchase with the credit card and then applied a credit to the card. This avoided the overhead of POS integration and training. However, the important feedback to the consumer did not occur at the time of the sale, in the restaurant, when using the designated credit card. Instead, the feedback to the consumer came much later, with the monthly credit card bill, where it may or may not have been noticed by the consumer. Further, while specific data was available about which customers received the reward, there was no way to correlate the costs of the marketing campaign with any particular sales.
In addition, credit card rewards programs have drawbacks for the card issuer. While the card issuer generally earns money for each use of the card (typically a percentage of the transaction, interchange fee, etc.), the cost of the rewards partially offsets that income.
Thus, conventional promotional campaigns tend to be expensive and/or fail to provide timely and specific feedback to the promoter and the consumer.